The Australian Charities and Not-for-profits Commission (ACNC) has released the annual Australian Charities Report 10th Edition (the Charities Report), analysing the activity of 51,536 charities over the 2022 reporting period. 

The Charities Report is conducted annually and aims to give an overview of the sector by aggregating data from submitted Annual Information Statements. It provides a holistic and sector wide view and highlights issues facing the sector from 1 July 2021 to 31 December 2022.

Overall, the data indicates that cost-of-living issues and COVID-19 have impacted charities, leading to an a disproportionate growth in expenses and liabilities growing compared to revenue and assets. The Charities Report also provides a key indicator of how the Australian Government’s commitment to double philanthropic giving by 2030 is progressing.

Revenue, assets, liabilities and expenses increasing for charities

• Total revenue (funds a charity receives when undertaking its ordinary activities) in the sector increased by $11 billion (5.6%) to a record high of just over $200 billion over the reporting period. This increase is greater than the 3% growth the Australian economy experienced in the 2022-2023 financial year. Revenue from the government continued to represent 51% of the charity sector’s revenue.
• However, expenses driven by increased costs, inflation and interest rates, increased by $22 billion in the same period, up by 12.6%. This increase is twice the rate of inflation. Employee expenses increased by 10% compared to 2021, totalling 55.2% of expenditure.
• Only 0.5% of Australia’s charities are classed as extra large (with a revenue of $100 million or more), yet these charities accounted for more than 54% of the sector’s total aggregated revenue. Despite making up about one third of the sector, extra small charities (with a revenue of $50,000 or less) generated just 0.1% of the sector’s revenue.
• Charity assets continued to grow with the sectors’ total assets reported at approximately $457 billion, representing an 8.3% increase from the previous reporting period. Assets are any resources controlled by a charity and include cash, shares, property, equipment and trademarks.
• Liabilities also grew in the charity sector, increasing by 11.5% to total $158 billion owed to suppliers, creditors or lenders. 
• On average, charities continued to hold more assets than liabilities in the 2022 reporting period based on the asset ratio of total assets against total liabilities but has decreased from the asset ratio in 2021.

Despite cost-of-living stress, Australians are still giving

• Despite rising living costs, charities saw donations and bequests rise to $13.9 billion, an increase of $584 million when compared to the previous year, growing by 4.4%. The top 30 charities (charities with largest donations and bequests totals in Australia) received 20% of all donations and bequests made to the charity sector over the reporting period.
• Nearly one fifth of registered charities are grant makers, distributing $11.7 billion in grants and donations over the reporting period, an increase of 21% from the 2021 reporting period. $9 billion was spent on grants and donations within Australia.

Charities remain a major employer, but volunteer numbers remain lower than previous years

• The charity sector constitutes 10.5% of the Australian workforce, employing 1.4 million people. Approximately 51% of charities are run solely by volunteers. 
• Charities reported engaging 3.5 million volunteers during this period, an increase of 320,000. However, volunteer numbers remain below the 2018 peak of 3.77 million.
• Most of the reported volunteers have been attributed to Clean Up Australia, who had more than 908,000 volunteers.

Religion and education remain the most popular common purposes

• The most common registered charitable subtypes were religion (14.19%) and education (14.15%). Notably, approximately 30% of charities are registered with multiple subtypes. Charity subtypes reflect the charitable purpose a charity is registered with.
• Advancing security, public policy, reconciliation and human rights remain the least common registered subtypes, each representing under 1% of registered charities.

Charity activities remain the same

• Consistent with the previous reporting period, the most common program reported classifications were religion and faith-based spirituality, human services and education.The least common categories were social services, science and international relations. These classifications are best on the International Classification of Not-for-profit Organisations.
• The primary beneficiaries of charity programs consistently remains adults at 8.1%, followed by families at 6.9%, and youth at 8.0%.
• About 4% of charities reported they did not undertake activities during the reporting period, with 25% of those citing COVID-19 as the reason why, versus 43% in 2021. Other reasons cited included the winding up of the organisation, lack of received funding, and a shortage of staff or volunteers.

What does the Charities Report tell us?

The Charities Report looks at how charities are handing the cost-of-living crisis and the continued recovery from the COVID-19 pandemic. These challenges are not unique to the charity sector as all businesses are experiencing operating pressures.

A lower asset ratio indicates charities are feeling the pinch and less reserves are available to help ensure financial stability and sustainability. While increases in expenses and liabilities have outpaced increases in revenue and assets (in percentage terms), charities are still providing services to the community and Australians are still contributing their time and money to the charity sector. This Charities Report demonstrates the support of the Australian community and the ongoing resilience of the charity sector to withstand evolving challenges to keep delivering essential services for the community.

For more information, you can access the full report on the ACNC website, and the Charity Data Explorer which provides all the datasets which may be directly relevant to your charity.